i have approached a broker recently regarding mortgage approval, the service being provided to me i was told is free and that their payment will be made to them by the bank at a percentage of what loan i take out. does anyone know what this percentage is and if i approach banks myself can this saving to them be used as a bargaining tool by me for giving them my custom?
mortgage brokers fee
- Thread starter Jasonia
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It's different percentage for different banks. Having just used a broker myself I think it saves a lot of time and effort going through a broker. And I don't think you will save anything by going directly to the bank unless you're on very good terms with your bank manager!
the broker i am using seems a bit over eager for my liking and is just a small bit off from promising me the world. from what i know of banks they dont like to throw money away and was just thinking if say for example broker was getting 1% of a 200,000 mortgage thats 2000 euro they are making for sending a few faxes and making a few phone calls. i dont see why a bank would not want to save themselves half that by bein approached by the customer personally and giving them say 1000 euro cash back for giving their custom. there is probably some law against it?
I don't know about other brokers but I used REA who publish what percentage of their business goes to what bank so you know they haven't any deals with any particular banks. They're only going to give you quotes - you can always check banks yourself too and compare. Just because you use the services of a broker doesn't mean you have to go with what they suggest!
i know majority of brokers would not have deals in place with particular banks and would work in the customers best interest. what i am saying is that if two people requirin a mortgage for 200,000, one goes direct to the bank and one through a mortgage broker, if same bank is chosen by the person using the broker, the bank is saving themselves 2,000 euro from the person who approached them directly by not having to pay the brokers fees. its this saving they are making that i want to know can be used as a bargaining tool with them.
Answer is NO! Brokers are bringing them lots of business, you are bringing them 1 mortgage!
No, I work in printing! Would probably make more money as a mortgage broker though.
I only know that stuff because I'm in the middle of the property purchase process myself. At the contracts just signed stage!Look at it like buying in bulk! Or trade discounts.
A broker will do the following work as part of a mortgage application, which will otherwise have to be done by the bank branch if the client approaches the bank directly: -
The above work will be done by the broker in return for their commission. If the client goes in to the bank directly the bank branch will have to do all of the above themselves.
Then there's the fact that a bank branch will offer you only the mortgage products of one lender - you can of course research all lenders' rates if you wish to spend the time doing so.
Finally, as has been said above, many lenders rely heavily on brokers to bring them business so they are reluctant to undercut one of their own distribution channels.
I am a broker, by the way.
- Discuss the requirement with the client
- Discuss the various rate options (variable, tracker, fixed, interest-only, discounted etc.) and provide quotations for the cost of any suitable options
- Send out salary certificates and advise the client what other documents will be required to support their application
- In some cases, follow up when the client doesn't send in all the requested documents
- Arrange completion of the application form
- Submit the application to the credit team in Head Office
- Once approved, arrange the valuation
- Once the loan offer has issued, liase with the client re gathering any further documents are required by the loan offer
The above work will be done by the broker in return for their commission. If the client goes in to the bank directly the bank branch will have to do all of the above themselves.
Then there's the fact that a bank branch will offer you only the mortgage products of one lender - you can of course research all lenders' rates if you wish to spend the time doing so.
Finally, as has been said above, many lenders rely heavily on brokers to bring them business so they are reluctant to undercut one of their own distribution channels.
I am a broker, by the way.
I bought two houses - one going through a broker and one going directly to my bank. The broker was a pain, dealt with three different people and no-one wanted to know.
The second was (if housebuying can ever be called this) a pleasure. I was changing jobs; selling a house and buying a house and working full time from Brussels, so the mortage advisor from my branch travelled to the airport branch, we had one meeting. No need for certs anything (they used my salary going into my account). And they lent me 32k to cover the time lag between the purchase and the sale. And didn't charge me any interest on it for the three months I had it. I'm not normally one to praise my bank (BOI) if this level of service stopped me from switching banks so far. (Although the increased mortgage is making me think about it!)
The second was (if housebuying can ever be called this) a pleasure. I was changing jobs; selling a house and buying a house and working full time from Brussels, so the mortage advisor from my branch travelled to the airport branch, we had one meeting. No need for certs anything (they used my salary going into my account). And they lent me 32k to cover the time lag between the purchase and the sale. And didn't charge me any interest on it for the three months I had it. I'm not normally one to praise my bank (BOI) if this level of service stopped me from switching banks so far. (Although the increased mortgage is making me think about it!)
Dave Vanian
Registered User
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Your story suggests two things to me: -
(1) You were unfortunate enough to deal with a poor broker. Like any professional, ideally people should choose their broker by personal recommendation.
(2) Your application was presumably for a fairly large mortgage and your relationship with your bank good (fairly large salary etc.) I can't see a bank offering this kind of service and an interest-free loan to every Tom, Dick or Harry who walks in. But it is impressive nonetheless.
(1) You were unfortunate enough to deal with a poor broker. Like any professional, ideally people should choose their broker by personal recommendation.
(2) Your application was presumably for a fairly large mortgage and your relationship with your bank good (fairly large salary etc.) I can't see a bank offering this kind of service and an interest-free loan to every Tom, Dick or Harry who walks in. But it is impressive nonetheless.
You'd be better off negotiating with a broker and splitting the commission with them, as the Lender will have no interest in cutting a deal with you. (although Halifax will give €1000 cash on a remortgage and free legals if you deal direct with them - which wouldn;t be available through a broker).
Although keep in mind that any negotiated deal with the broker will have to take into account of a clawback period - in other words that the fee paid to the broker by the lender is liable to be clawed back on a pro-rata basis over three years. So (for example) if you moved your mortgage away after 18 months - half the fee would be clawed back.
This is in place with the lenders to prevent you being churned and that you get the best advice to ensure that you are recommended the products most suitable for your circumstances.
So you could strike a deal with a broker that created no contingent liability over the clawback period.
Dave Vanian
Registered User
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So much for my theory then. (Mind you, your salary was such that you were well within Bank of Ireland's criteria, but I'm grasping.) I stand corrected. Hats off to Bank of Ireland in this instance.
I
irishlinks
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No one will get the best mortgage available from the majority of brokers in Ireland - because NIB don't pay brokers any commission. In many cases NIB will be the lowest rate for many borrowers - those with LTV under 80%. Brokers provide a service for people who haven't the time or inclination to find the best deal. They get paid for it - that's fine - but some people will not be getting the best available rate all the time through a broker.
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